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Years ago a white knight appeared on the beaches of Barcelona. He was the one from the White Moon, one of the several transcripts of Samsón Carrasco, a character from the second part of Don Quixote whose name changes to always end up the same: a clean slap with our ingenious gentleman. On the shores of the Mediterranean, both fight with all their madness (or sanity) to see who has a more beautiful girlfriend. The fact is that white, like the one worn on Samsón Carrasco’s shield, is a very relevant color in the Arthurian legends propagated through the crazy books of chivalry. Because the white knight, as opposed to the black one, was the savior who appeared at the last minute to deliver sword blows left and right. And the term has reached our days through the most Anglo-Saxon way possible, that of mergers and acquisitions. A white knight, as we will begin to hear these days, is, for example, what could save the Sabadell board from the hostile takeover bid by BBVA.
Without declared enmity until just a few hours ago, BBVA and Sabadell had been crossing paths for some time. They tested their merger in 2020 and now, in the second of the attempts, they have already begun to throw things away. Early yesterday, BBVA launched a hostile takeover bid for Sabadell and, late at night, Sabadell reported BBVA to the CNMV for collecting incomplete information, as Eduardo Magallón states here. Everything seems to indicate that we are facing the biggest corporate clash since the takeover of Gas Natural for Endesa. Let’s review some of the things that happened these days.
Sabadell’s ‘no means no’. The week was going to end in a different way, wrapped in the inertia of Sabadell’s ‘no means no’ to the friendly BBVA merger project. BBVA, let us remember, had proposed a merger through an exchange of shares that respected the operational headquarters of the Catalan bank and even its brand in some territories. The third listed bank in the euro zone would have been born, with more than one trillion euros in assets. However, from the first day it was clear that Sabadell found this offer insufficient, which was confirmed at a board meeting held on Monday in Madrid in which advisors from the most prestigious North American banks were present. There, one of the key expressions of this week was illuminated: BBVA’s offer “significantly undervalues” Sabadell. The prefix infra was not enough, but a hurtful eight-syllable adverb was added. There are rejections that hurt.
Morale boost in Sant Cugat. Although the council on Monday did not adopt its decision unanimously, or at least Sabadell has not reported that it did so, the bank came out with high morale. Saying “no” is also sometimes liberating. Sabadell took the opportunity to encourage employees and reported that it will generate excess capital of 2.4 billion between 2024 and 2025. Once the difficult times have been overcome and the British subsidiary TSB has been restructured, it is going to deprive its managers of the illusion of run a growing bank.
The good way or the bad way. However, very early yesterday Thursday came the surprise, a change of script in the form of a blue takeover bid. BBVA repeated its offer in the same terms, except in two aspects. The first: it is no longer a proposal to the board of directors, but is addressed directly to the shareholders. The second: corporate concessions are over. The president of Sabadell will not be guaranteed a vice presidency nor will the Catalan bank three seats on the board of the resulting bank.
Everything broke in fifteen days of April. As the president of BBVA, Carlos Torres, said yesterday, in mid-April he had a “face-to-face” meeting with the president of Sabadell, Josep Oliu, to start cooking a fusion over low heat. On April 30, he was to send him a proposal to start talks, always with discretion, but that same day a leak from London disrupted the plan. The CNMV forced BBVA to take a portrait and Sabadell called a board of directors, this Monday, to show its rejection. A day before, on Sunday, Torres sent an important message to Oliu to tell him “he has already exhausted all the space” to improve the proposal.
The blue knight has already started the attack. After suffering a rejection with an eight-syllable adverb, BBVA has gone on the attack. He assures that he has already contacted some Sabadell shareholders willing to exchange their shares. His objective is to at least exceed 50% of the capital, which would allow him to control the Catalan bank and consolidate them in his accounts. The role of institutional investors will be key. He would then complete the plan by merging the two entities. That’s where he would need the go-ahead from the Government.
And here the white knight thing appears. At this point, speculation takes its own path, with the only certainty that, as the events of these days have shown, anything can happen. Some speculate a defensive move by Sabadell consisting of going after a bank like Unicaja, fresh from a traumatic merger with Liberbank. Others evoke the figure of the aforementioned white knight, of a third party who emerges as an ally and who comes with a better offer. For now, as in the chivalric novels that Don Quixote read, the knight in question is just a specter that flies over the scene. BBVA has hinted that it will no longer raise the price of its offer, not even if this mysterious character appears.
The red lines. Precisely from the city where Cervantes was born, Alcalá de Henares, the Minister of Economy, Carlos Body, announced yesterday the Government’s rejection of the operation, reports Noemi Navas. It is “harmful” to competition, to financial stability and to territorial cohesion, he said. The Government cannot prevent the takeover bid for Sabadell, but it can prevent the subsequent merger by absorption that BBVA aspires to.
Penance goes into the argument. With his ministerial sword, Corps has already marked a red line on the ground. Will BBVA continue ahead knowing that a veto on the merger awaits after the takeover bid? It looks like it is. In its argument, the bank implicitly carries penitence: yesterday it dedicated slides, paragraphs and speeches to insisting that it will increase credit in Spain and that it will not harm competition. However, the Bank of Spain and the competition authority, the CNMC, have spoken out these days on this matter, and they have done so with concern. Unlike what happened in the years of the crisis, greater banking concentration is now beginning to be viewed with suspicion. It is one of the great lessons of this chivalric chapter.
Now, the Catalan campaign implodes. The merger between BBVA and Sabadell, which did not quite fit into the speeches of the political parties, fully entered the Catalan campaign yesterday, as Luis Florio comments. Unanimously, the parties rejected the takeover bid while the Generalitat implores Brussels, Gabriel Trindade reports here. Businessmen and unions also did so. Couldn’t BBVA have chosen a worse time to launch its takeover bid? Torres assured at the press conference that it was not his intention. The leak of his plans precipitated events. Iván Redondo calls this phenomenon OPNI (unidentified political object).
Finally, what matters. For all that, how did the fight between Don Quixote and the Knight of the White Moon end? Well, how is it going to be, with our ingenious gentleman knocked down on the beach in Barcelona, ??insisting that he would rather die than confess that Dulcinea del Toboso is not the most graceful in the world. These days of banking chaos I am casually listening to an audiobook of Don Quixote on my trips on public transport. I recommend it to you. Listening transmits the richness of an oral language that, I fear, we have lost. How inexhaustible and universal is the character of Don Quixote. A high school teacher whose nickname I don’t want to remember said that she always has you between laughing and crying. Come on, just like the banking sector.
The SEPI already has an advisor for Telefónica. This week the SEPI has announced that its participation in Telefónica already reaches 7% – the intention is to reach 10% – and that Carlos Ocaña Orbis will be its representative on the board. Ocaña is a person very close to Pedro Sánchez, as Pilar Blázquez tells us here.
Repsol hits back at Iberdrola. The business war between the two companies remains open. The advertising regulator, Autocontrol, has declared an Iberdrola advertisement “misleading” following a complaint from Repsol. He does so after a complaint from Repsol that in turn comes after Iberdrola’s complaints of greenwashing Repsol.
Ouigo’s plans. The French high-speed operator has decided to operate fewer frequencies and open new routes in the price war, says Fernando H. Valls. To maintain the tension of low prices, it had to cut routes between Madrid and Barcelona. He hopes to arrive in the Andalusian corridor in the second quarter.
Agbar and Veolia clash due to the drought in Catalonia. The Spanish water management holding company and its new sole shareholder already have a first confrontation. The cause is reported here by Manel Pérez: the investments approved by Aguas de Barcelona, ??a 70% subsidiary of Agbar, to address the drought in Catalonia and which are mandatory to comply with the law on extraordinary measures approved last year by the Generalitat . Nothing more, until next week.
Hotusa sets the trend. In this interview with its president, Elisenda Vallejo and Maite Gutiérrez, they talk about the great hotel trend, that of quality after years of commitment to quality. This is a bit of what Rosa Salvador tells us here. The market for the rich must be wide, and if not, read this by Raquel Quelart about safe deposit boxes.
